Thread: The Net Neutrality Tax Hike

The Net Neutrality Tax Hike

Kevin Glass | Nov 14, 2014
President Obama's public stance that the FCC should reclassify broadband internet services as a Title II "common carrier" under the current Telecommunications Act carries many ramifications, but one is undeniable: there's going to be a hidden tax hike, and it's going to be paid for by consumers.Title II common carriers are required to "contribute" to what's called the Universal Service Fund - a government program to bring telecommunications services to underserved areas with the goal of universal coverage. Whether it's called "contributions" or fees or whatnot, the function of the program is a tax on corporate revenues in order to fund services for those who might not have them otherwise. It's a redistributive corporate tax paid for by consumers.

The USF tax amounts to more than a 16% charge on top of consumers' bills. As broadband service providers are not currently subject to the USF tax, a reclassification would mean that all consumers would see a jump around that size in their bill.

Considering that in some locales, the cheapest broadband service runs upwards of $50 per month, this will cost even the most price-conscious consumers an extra $100 per year - and for those at higher tiers, much more than that.

FCC commissioners past and present have agreed that the this net neutrality tax is unavoidable in a Title II reclassification scenario. In a discussion at the National Press Club on Friday, current FCC commissioner Ajit Pai laid out exactly what consumers would be seeing on their bills.

"Public utility regulation would mean higher broadband prices for consumers," Pai said. "Once broadband is classified as a telecommunications service, universal service charges would be assessed on carriers' broadband services. Many state and local taxes would automatically kick in."

"The net result is that every single American broadband customer would have to pay a new tax - or taxes - to access the internet."

An FCC decision to go with title II reclassification in order to enforce new net neutrality regulations would have a lot of deleterious effects. One of the most obvious is that it would be a tax hike on a service that the government believes is essential to American life.

​http://townhall.com/tipsheet/kevinglass/2014/11/14/the-net-neutrality-tax-hike-n1918998?utm_source=thdaily&utm_medium=email&utm_c ampaign=nl

With 5 million new obamaphone eligible illegals Obama needs more money for Carlos Slim - Net Neutrality tax.


September 30, 2012
Your Universal Service Fee at Work

By Rosslyn Smith


That Universal Service Fee we pay as part of our phone bill each month has helped double the number of "free Obamaphones" in the hands of people in Ohio since last year to more than 1 million. While the mainstream media has ignored this story, the Ohio press is covering it. Maybe interest in the You Tube rant of the now infampus Obamaphone Lady, now at 2.2 million views in three days, will help get out the story of how this program skyrocketed in a key swing state. Then there is the issue of the dubious ethics of having private businesses both actively promote a government welfare program and name it after an elected figure in their marketing materials

From the Dayton Ohio Daily News.

The program in Ohio cost $26.9 million in the first quarter of 2012, the most recent data available, versus $15.6 million in the same timeframe in 2011. Compared to the first quarter of 2011, the number of people in the program nearly doubled to more than a million.Growth could cost everyone who owns a phone. The program is funded through the "Universal Service Fund" charge on phone bills - usually a dollar or two per bill - and the amount of the fee is determined by the cost of this and other programs.
A growth of $100 million in this program could result in an increased fee of a few cents on the average bill, according to officials from the agency that administers the program. The total cost of the program nationwide was $1.5 billion in 2011, up from $1.1 billion in 2010.

Growth in the program is fed by the 2008 decision to extend it to prepaid cellphone companies, which get up to $10 every month that someone is subscribed. The number of cellphone companies offering the service in Ohio grew from four in 2011 to nine currently, with seven more awaiting approval from the Public Utilities Commission of Ohio.


The left is freaking out over this. In addition to maintaining it is racist to show a black person making a fool of herself they are screaming to high heaven that the program began under Ronald Reagan. That is true, but they fail to note that in the 1980s it was proposed as a very limited program to provide land line service to those who could show both financial need and a reason they needed a phone, such as medical conditions that would require them to call emergency services. As is common, once in place the program expended until by 2008 some 7.1 million were enrolled. Then in 2008 it was revised to include cell phones and actively marketed by cell phone providers to people on a variety of government assistance program regardless of need. Today 12.5 million free phone accounts exist.

It's the active marketing of this program by cell phone providers that is most problematical. In The Shady Ethics of 'The Obama Phone' Timothy Dalrymple writes:

Imagine, for instance, that it were the government itself that advertised the phones as Obama phones, starting in 2009. This would be, at the very least, deeply misleading. It would be taking credit for a program begun under predecessors. It would be similar to President Bush in his first term, if he had come to office after Clinton initiated a program that gave free cars to welfare recipients, seeking electoral advantage by advertising them as "Bush cars."
But clearly (?) that's not the case here, right? A visit to FreeGovernmentCellPhones.net - which calls itself "a small publishing company and the authority on the U.S. government's Lifeline Assistance program as it applies to mobile phones" - decries the "false rumor" of Obama Phones, which it calls an "incorrect term" because the cell phone program began several months before Obama's election. Case closed.

Or maybe not. Visit ObamaPhone.net and here's what you see (I suspect they'll make changes soon, if they haven't already, so I took a screenshot):

It gets even more interesting.

When you click the link at ObamaPhone.net to apply for a free cell phone, you're redirected to...wait for it...FreeGovernmentCellPhones.net. That's right. The same website that decried the "false rumor" and "incorrect term" of The Obama Phone Program has another website, surely desired to attract search engine traffic, that advertises The Obama Phone Program. Nice.
UPDATE: The website has already been changed! Visit Obamaphone.net now, and you'll get something like a blog with no pictures of Obama, as though they're in the process of dismantling the site. But surely there's nothing to see here, folks! Let's talk about Mitt Romney's tax forms!

That the administration did this isn't surprising, It's long been the Chicago way to put the mayor's name on everything from the Welcome sign at the city limits to the trucks that pick up the garbage. I think they'd change the name of the airport with each administration if they could. What is surprising is the complete lack of interest not only in why at least one key state is now awash with taxpayer paid cellphones but who paid for the extensive web marketing of this program. As Dalrymple notes:

Who funds the companies like FreeGovernmentCellPhones.net and ObamaPhone.net? Did they begin calling it "the Obama Phone" before or after the rumors of Obama phones began to spread through email? Do they have a profit-share arrangement with the wireless telecoms that receive money (albeit indirectly) from the government to distribute free cell phones? Are they paid by the federal government to help spread the word about the free cell phone service program?

These websites are hard to penetrate, so I don't know the answer, but it's a juicy question: Is the Obama administration effectively paying a company to advertise the free cell phones as Obama Phones? Or was the administration aware of the practice, and have they done anything to stop it? I'm sure the mainstream media are hard on the case, investigating the Obama administration in that relentless way they do.

Just how extensively has this program been marketed? Here is how one multimillionaire Democrat Senate from a swing state reports how she became a critic of the program.


Sen. Claire McCaskill, D-Mo., received a mailed solicitation last year informing her she was eligible for a phone, leading her to question the program.


"I am troubled by the expansive potential for the program to be abused," McCaskill wrote the FCC in December.
No kidding.



That Universal Service Fee we pay as part of our phone bill each month has helped double the number of "free Obamaphones" in the hands of people in Ohio since last year to more than 1 million. While the mainstream media has ignored this story, the Ohio press is covering it. Maybe interest in the You Tube rant of the now infampus Obamaphone Lady, now at 2.2 million views in three days, will help get out the story of how this program skyrocketed in a key swing state. Then there is the issue of the dubious ethics of having private businesses both actively promote a government welfare program and name it after an elected figure in their marketing materials


From the Dayton Ohio Daily News.

The program in Ohio cost $26.9 million in the first quarter of 2012, the most recent data available, versus $15.6 million in the same timeframe in 2011. Compared to the first quarter of 2011, the number of people in the program nearly doubled to more than a million.
Growth could cost everyone who owns a phone. The program is funded through the "Universal Service Fund" charge on phone bills - usually a dollar or two per bill - and the amount of the fee is determined by the cost of this and other programs.
A growth of $100 million in this program could result in an increased fee of a few cents on the average bill, according to officials from the agency that administers the program. The total cost of the program nationwide was $1.5 billion in 2011, up from $1.1 billion in 2010.

Growth in the program is fed by the 2008 decision to extend it to prepaid cellphone companies, which get up to $10 every month that someone is subscribed. The number of cellphone companies offering the service in Ohio grew from four in 2011 to nine currently, with seven more awaiting approval from the Public Utilities Commission of Ohio.


The left is freaking out over this. In addition to maintaining it is racist to show a black person making a fool of herself they are screaming to high heaven that the program began under Ronald Reagan. That is true, but they fail to note that in the 1980s it was proposed as a very limited program to provide land line service to those who could show both financial need and a reason they needed a phone, such as medical conditions that would require them to call emergency services. As is common, once in place the program expended until by 2008 some 7.1 million were enrolled. Then in 2008 it was revised to include cell phones and actively marketed by cell phone providers to people on a variety of government assistance program regardless of need. Today 12.5 million free phone accounts exist.

It's the active marketing of this program by cell phone providers that is most problematical. In The Shady Ethics of 'The Obama Phone' Timothy Dalrymple writes:

Imagine, for instance, that it were the government itself that advertised the phones as Obama phones, starting in 2009. This would be, at the very least, deeply misleading. It would be taking credit for a program begun under predecessors. It would be similar to President Bush in his first term, if he had come to office after Clinton initiated a program that gave free cars to welfare recipients, seeking electoral advantage by advertising them as "Bush cars."
But clearly (?) that's not the case here, right? A visit to FreeGovernmentCellPhones.net - which calls itself "a small publishing company and the authority on the U.S. government's Lifeline Assistance program as it applies to mobile phones" - decries the "false rumor" of Obama Phones, which it calls an "incorrect term" because the cell phone program began several months before Obama's election. Case closed.

Or maybe not. Visit ObamaPhone.net and here's what you see (I suspect they'll make changes soon, if they haven't already, so I took a screenshot):



Read more: http://www.americanthinker.com/artic...#ixzz3JF5N0ZWX
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I originally posted this in Other Topics. Then I realized that this new tax is needed with all of the illegals that will be flooding our borders - they have to have an Obamaphone (smartphone) to make it easier to organize.

Originally Posted by Newmexican

I originally posted this in Other Topics. Then I realized that this new tax is needed with all of the illegals that will be flooding our borders - they have to have an Obamaphone (smartphone) to make it easier to organize.

Infuriating is'nt it ????

Obama wants to fix the internet like he fixed obamacare...adding more taxes

http://t.co/iUjMouxaz0

http://twitter.com/littlebytesnews/s...15303452266496






http://www.alipac.us/f19/wtf-google-republican-has-company-backing-comcast-net-neutrality-313702/

http://www.alipac.us/f19/net-neutrality-update-203319/

We already pay Federal taxes, line taxes etc, to have the service AND we pay the Universal Fund fee on that connection. So Obama want to tax us twice for the same service to fund more of his giveaways?

Limiting Internet Congestion A Key Factor In Net Neutrality Debate

Thursday, December 11, 2014 11:28

Before It's News)
Provided by University of California, Berkeley’s Haas School of Business
Study suggests price discrimination would lead to web congestion
Too many vehicles on the highway inevitably slow down traffic. On the Internet information highway, consumers value high-speed Internet service, but there is little reason to think broadband traffic congestion will improve if the Federal Communications Commission abandons net neutrality, according to economic research.
In their paper, “The Economics of Network Neutrality,” Ben Hermalin, Haas Economics Analysis and Policy Group, and Nicholas Economides, Berkeley-Haas visiting professor from NYU’s Stern School of Business, find that if Internet Service Providers known as ISPs initiate price discrimination in their pricing, a “recongestion effect” will occur. In other words, online delivery channels that are less congested at the onset of new pricing tiers will eventually become recongested when consumer behavior adjusts.
As the net neutrality debate continues, the study published in the RAND Journal of Economics (Vol. 43, No. 4, Winter 2012) provides a reminder of the potential fallout that multiple pricing might have on online traffic.
Hermalin and Economides use models to explore the economics of the current pricing regime known as “net neutrality,” in which residential ISPs, such as ATT and Comcast, treat all content providers equally and don’t directly charge them for the content they deliver to end users.
The models measure linear pricing versus price discrimination and compare the rate of congestion through the information pipeline between broadband providers and households under these different pricing strategies.




Hermalin says that many existing economic models examining price discrimination haven’t taken the fixed capacity component seriously. Once the fixed capacity component is understood, “relaxing net neutrality becomes a bad thing,” he says, “Except for the ISPs.”
Linear pricing sets a fixed price for a product or service. Price discrimination is a pricing strategy that offers the same or similar product at different price points in order to maximize consumer demand or preference. For example, a type of breakfast cereal may come in two sizes: a small box for individuals and a large box for families. Even though the larger box of cereal may contain twice as much cereal, the price is not double the cost of the small box.
President Obama supports net neutrality but some ISPs continue to lobby the FCC to authorize “paid prioritization” or the creation of Internet “fast lanes” for those willing to pay more.
To better understand broadband congestion, consider Prof. Hermalin’s hypothetical example of traffic on a real highway. If two of three lanes were reserved just for Mercedes Benz vehicles, drivers of Mercedes cars would enjoy a faster commute to and everyone else in the single remaining lane would be forced to slow down due to the added congestion. Predictably, Hermalin explains, more people would start buying Mercedes in order to take advantage of two lanes rather than one lane. The result? The two lanes that were previously less congested would recongest.
“Ultimately there is no real benefit because there is a fixed capacity on the highway,” says Hermalin. “Likewise, the ISPs have a fixed amount of bandwidth to spread around unless they invest in more.”
In the net neutrality debate, ISPs claim that in order to invest in more bandwidth, they need to charge content providers (Netflix, Amazon, etc.) either for streaming certain content or for facilitating content at premium speed. For years, the FCC has debated whether to alter the current system of a neutral network.
The findings also suggest that while consumers may be willing to pay more for faster service, if net neutrality rules were relaxed, eventually the larger economic fallout would be that people will try to spend less in reaction to increasing prices.
The FCC’s authority to regulate Internet traffic is currently under appeal as broadband providers challenge whether providing Internet service is a utility subject to FCC regulation.
See the authors’ newest working paper, “The Strategic Use of Download Limits By A Monopoly Platform.”
> Continue reading…
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